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February 19, 2024
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Non-Qualifed Pension Earnings and IRA contribution

  • February 19, 2024
  • 1 reply
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I have income reported every year on a W-2 from a non-qualified pension plan. That income was reported as wages prior to 2022. In 2022 it was reported on Schedule 1, line 8t. That income was my only earned income (W-2). In 2022, Turbo Tax said I was eligible for an IRA contribution. In 2023, I am in same situation, but Turbo Tax says I have no earned income and cannot make an IRA contribution. What changed?

    Best answer by dmertz

    When there is an amount in box 11 of your W-2, TurboTax asks whether the amount in box 11 represents a distribution from then nonqualified pension plan.  Answering incorrectly in your case will allow TurboTax to treat the amount in box 1 as being compensation that will support an IRA contribution.

     

    Another possibility is that you are married, file jointly and your spouse had compensation that would support your IRA contribution.

    1 reply

    dmertzAnswer
    Employee
    February 19, 2024

    When there is an amount in box 11 of your W-2, TurboTax asks whether the amount in box 11 represents a distribution from then nonqualified pension plan.  Answering incorrectly in your case will allow TurboTax to treat the amount in box 1 as being compensation that will support an IRA contribution.

     

    Another possibility is that you are married, file jointly and your spouse had compensation that would support your IRA contribution.